VHCA and DMAS Meet to Discuss Dual Eligible Payment Demonstrations

The Virginia Health Care Association’s Ad-Hoc Committee on Managed Care held its initial meeting on Wednesday, April 4, 2012 in the association’s office in Richmond.  For this meeting, committee members were joined by Cindi Jones, Director of the Department of Medical Assistance Services (DMAS) and other senior staff from the Department.  

DMAS staff outlined their dual eligible financial alignment initiative and shared information about the planned timeline for the project.  Ms. Jones informed members of the committee that the Department is working towards the April 13, 2012 publication of a draft proposal  to the Centers for Medicare and Medicaid Services (CMS) for public comment purposes.  Additional key dates discussed were May 20, 2012 as the deadline for receipt by DMAS of letters of support and May 31, 2012 as the deadline for DMAS submission of their formal proposal to CMS.

Dr. Paula Margolis, Policy and Planning Manager at DMAS presented additional information to the committee about the demonstration initiative.  In her comments, Dr. Margolis reported that 38 states initially submitted letters of intent to pursue dual eligible payment alignment demonstrations under provisions established by the Affordable Care Act (ACA).  Subsequently, 10 states have elected not to pursue the initiative leaving 28 states with plans to seek approval for and implement demonstrations.  The state demonstrations can implement either of two models permitted by the ACA – a capitated model involving three-way contracts between CMS, DMAS and health plans (managed care organizations) or a managed fee-for-service model.  Dr. Margolis indicated that DMAS intends to pursue only the capitated model and that the Department was planning to contract with three managed care organizations in each of the four geographic demonstration regions – Northern Virginia, Central Virginia, Tidewater and Charlottesville/Western.

Following the presentation by Dr. Margolis, committee members posed a number of questions to DMAS staff and shared some initial concerns.  Issues identified included the impact on facility general and professional liability, utilization of electronic medical records, the process for determining and collecting patient pay liabilities (both Medicare and Medicaid), payment floors, prompt payment provisions, required three-day qualifying hospital stays for Medicare eligibility and the role of value based purchasing provisions within payment methodologies.

While DMAS staff were able to address some of the issues, they indicated that their planning had not progressed to the stage of being able to respond to many of the questions raised, and particularly those involving Medicare skilled services and related payment.  General comments by DMAS staff suggested that the Medicare component of the demonstration would be modeled after existing Medicare Advantage program design.  In response to a question about provider protections from financial liability in the event of insolvency of a health plan, DMAS personnel indicated that health plans would be subject to strict solvency provisions of the state Bureau of Insurance with reserve requirements sufficient to cover all outstanding liabilities.  Ms. Jones discussed the Department’s desire to obtain letters of support from all stakeholders to supplement their proposal to CMS.

The second meeting of the Ad-Hoc Committee on Managed Care will take place on Thursday, May 10th at 10:30 AM in the VHCA offices.  A set of recommendations developed by the committee were submitted to DMAS on April 12th.  The recommendations are available here.